D.C. Circuit deepens split on interim storage

High level summary of key “Away from Reactor” spent fuel storage court cases

A series of recent federal circuit court decisions have brought to the forefront and called into question what has long been viewed as established precedent on the NRC’s authority under the Atomic Energy Act (“AEA”) to license spent fuel storage facilities away from nuclear reactor sites—what is often called a “consolidated interim storage”—or CIS—facility.  In brief summary, the NRC’s authority to license a CIS facility was initially challenged in federal courts in the early 2000s, when the NRC was licensing the first commercial CIS, known as the Private Fuel Storage facility.  At that time, a number of court challenges were brought contesting the NRC’s authority to license a CIS facility, and in two circuit court decisions—specifically, in the D.C. Circuit and the Tenth Circuit—the court upheld the NRC’s authority to license the CIS under the AEA.  For NRC licensing decisions, as a general matter, the federal circuit courts have direct appellate review, and the appeal can be brought in either the D.C. Circuit or the circuit court where the proposed facility is located.

While the Private Fuel Storage facility was never constructed, in recent years two new applications for CIS facilities were filed with the NRC.  The two proposed facilities are very close in location but in two different states—one in West Texas and one in southeastern New Mexico.  The licenses for both facilities were challenged in Texas, in the Fifth Circuit, with the court ultimately ruling that the NRC did not have the authority to license a CIS under the AEA or the Nuclear Waste Policy Act (“NWPA”), and further referencing the U.S. Supreme Court’s newly adopted “major questions doctrine.”

The D.C. Circuit’s decision last week upholds the NRC’s licensing authority for a CIS, in line with the D.C. Circuit and Tenth Circuit precedent from the early 2000s, and contrary to the Fifth Circuit decisions from the past year.  This decision further deepens the circuit split between the various courts—which occurs when two different federal circuit courts issue contrary decisions on the same legal issue—and increases the likelihood that that Supreme Court may take the cases under review.  Currently, both Fifth Circuit decisions from the past year are on petition to the Supreme Court for a writ of certiorari, which is a request that the Supreme Court grant judicial review.

Deeper dive into the underlying decisions

Ultimately at issue in these decisions is the extent of the NRC’s broad authority under the AEA to license an array of facilities that use or possess radioactive material, including spent fuel.  This authority has been recognized to extend to interim storage facility licensing, as affirmed in cases involving the Private Fuel Storage facility license back in 2004, namely the D.C. Circuit decision in Bullcreek v. Nuclear Regulatory Commission, 359 F.3d 536 (D.C. Cir. 2004) and the Tenth Circuit decision in Skull Valley Band of Goshute Indians v. Nielson, 376 F.3d 1223 (10^th Cir. 2004). The Private Fuel Storage facility was issued a license from the NRC in 2006 to store spent fuel and other high-level nuclear waste at a designated CIS facility in Utah, although the facility was never built.

In recent years, there has been an increased interest in CIS facilities, with the NRC licensing two facilities: one in Texas and one in New Mexico.  Interim Storage Partners (“ISP”)—a joint venture between Orano USA and Waste Control Specialists—applied for a license for a proposed CIS facility adjacent to Waste Control Specialist’s existing low-level nuclear materials disposal facility in Andrews County, Texas.  In September 2021, the NRC issued a 40-year license to ISP to “receive, possess, store, and transfer” up to 5,000 metric tons of spent fuel and 231.3 metric tons of Greater than Class C waste at the CISF site.  Around the same time, Holtec International applied for a license for a proposed CIS facility across the border in Lea County, New Mexico, in an isolated parcel within thousands of acres of undeveloped land owned by a joint venture of the surrounding New Mexico counties.  In May 2023, the NRC issued Holtec International a 40-year license to store up to 8,680 metric tons of commercial spent fuel.

Multiple court challenges were brought pertaining to these facilities, including two cases in the Fifth Circuit in Texas, one case in the Tenth Circuit in New Mexico, and one in the D.C. Circuit.  Of note, in Texas v. Nuclear Regulatory Commission, the Fifth Circuit created a circuit split when it revoked ISP’s license and held that contrary to precedent, the AEA did not authorize the NRC to license away-from-reactor interim storage facilities, and that in fact the NWPA prohibited it.  We previously wrote about this case here, but we provide a brief summary below.  The Fifth Circuit shortly followed this decision—and cited it—by vacating Holtec’s license in a separate decision.  On the other hand, the Tenth Circuit affirmed precedent and determined the NRC did have such authority in a 2023 decision State of New Mexico ex rel. Balderas v. Nuclear Regulatory Commission.

Last week’s D.C. Circuit case Beyond Nuclear v. Nuclear Regulatory Commission renews and deepens this circuit split by reaffirming precedent, holding that the AEA grants the NRC authority to license interim storage facilities and that the NWPA does not affect such authority—a holding in harmony with the prior D.C. and Tenth Circuit decisions but in direct conflict with Fifth Circuit decisions from the prior year. 

We provide a brief background on the recent key D.C. Circuit and Fifth Circuit court cases below.

• Summary of Recent D.C. Circuit Court Decision in Beyond Nuclear v. NRC

In 2017, Holtec International applied to the NRC for a license to construct and operate a CIS facility in Lea County, New Mexico.  Beyond Nuclear, an anti-nuclear organization, and others petitioned to intervene in the NRC proceeding.  The NRC’s Atomic Safety and Licensing Board Panel denied the petitions to intervene, finding all the contentions inadmissible regardless of standing, and on appeal to the NRC Commissioners,  the Commission affirmed the Board’s decision.  The denied parties who had standing before the NRC petitioned the D.C. Circuit for review of the orders denying intervention, which the D.C. Circuit consolidated into a single case, Beyond Nuclear v. NRC. 

On August 27, the D.C. Circuit affirmed the NRC’s denial of the petitions to intervene, finding that the Commission reasonably refused to admit petitioners’ challenges.  Specifically, the court validated the NRC’s ability to license away-from-reactor storage of spent nuclear fuel.  Citing the D.C. Circuit precedent from the Private Fuel Storage case in the early 2000s, the D.C. Circuit stated that “the AEA ‘authorized the NRC to regulate the possession, use, and transfer of the constituent materials of spent nuclear fuel’ and to license the storage of spent nuclear fuel at onsite and away-from-reactor storage facilities.”  Further, it explained that even if the NWPA prohibits the Department of Energy from taking title to spent fuel, the NWPA “does not affect the NRC’s authority under the AEA to license and regulate private use of private away-from-reactor spent fuel storage facilities.”  Beyond Nuclear v. NRC at 9-10. 

The court did not address the major questions doctrine or explicitly mention the Fifth Circuit’s decisions, other than in a footnote stating that the Fifth Circuit vacating Holtec’s license fails to moot the D.C. Circuit case. 

• Summary of Recent Fifth Circuit Decision in Texas v. NRC

Orano USA, the U.S. subsidiary of the French global nuclear fuel cycle company, and Waste Control Specialists (“WCS”) formed a joint venture, ISP, to construct and operate a CIS facility for spent nuclear fuel at an existing WCS site in Andrews County, Texas.  In April 2016, ISP applied to the NRC for a license for its proposed CIS facility, and the NRC issued the facility license in September 2021.

Although it was not an intervenor in the NRC licensing proceeding, the State of Texas appealed the license to the Fifth Circuit.  The Fifth Circuit granted Texas standing using an ultra vires exception to the Hobbs Act, allowing Texas to appeal the license even though it was not party to NRC adjudication on the license.  As a general matter, under the Hobbs Act and caselaw, intervenors who have not participated in the NRC hearing process cannot then avail themselves of the courts to challenge an NRC licensing decision. In this case, the Fifth Circuit permitted Texas to bring its suit under an exception to the Hobbs Act articulated in a Fifth Circuit footnote from 1993 that suggests an unaffected party may appeal an agency’s action when the party alleges the agency exceeded its statutory authority.

In August 2023, the Fifth Circuit issued its decision, siding with Texas and vacating ISP’s license for the West Texas facility—in contradiction to the Tenth Circuit’s February 2023 holding in State of New Mexico ex rel. Balderas v. Nuclear Regulatory Commission.  A subsequent Fifth Circuit decision relied on Texas v. NRC in vacating the Holtec license in New Mexico, Fasken Land and Minerals Ltd., et al. v. NRC (2024).

In Texas v. NRC, the Fifth Circuit found that although the AEA provides the NRC with authority over the construction and operation of nuclear power plants, as well as special nuclear material, source material, and byproduct material, the NRC does not have the specific authority to license storage facilities for spent nuclear fuel away from reactor sites because storage of spent fuel is not specifically enumerated in the AEA.  The court also turned to the NWPA, which it said provides a “comprehensive statutory scheme for dealing with nuclear waste generated from commercial nuclear power generation,” but because the NWPA does not address private spent fuel storage it implicitly prohibits it.

Additionally, the court stated that “even if the statutes were ambiguous, the [NRC]’s interpretation wouldn’t be entitled to deference,” under the “major questions doctrine,” citing the 2022 Supreme Court decision West Virginia v. Environmental Protection Agency (EPA), wherein the Supreme Court adopted the major questions doctrine for the first time.    As the Fifth Circuit stated in Texas v. NRC, the “major questions” doctrine provides that courts should not defer to agencies on matters of "great economic and political significance" unless Congress has explicitly given the agencies the authority to act in those situations.  Spent fuel storage, per the Fifth Circuit, invokes the major questions doctrine. 

We previously wrote about the West Virginia v. EPA case when it was issued because of the wide-ranging impact it could have on federal agencies, especially ones with broad statutory authority granted by Congress. 

The deepening split and what comes next

After the Fifth Circuit denied the NRC and ISP’s requests to rehear Texas v. NRC en banc—a special procedure where all the judges in the Fifth Circuit would hear the case—the NRC and ISP petitioned the Supreme Court for a writ of certiorari, which is a request for the Court to review the circuit court decision.  We wrote about that petition here.  Shortly thereafter, given the similar facts and legal analysis between the two cases, Holtec and the NRC petitioned for a writ of certiorari on the Fifth Circuit’s decision vacating Holtec’s license.  If the Supreme Court grants certiorari, it is likely to consolidate the cases.

The D.C. Circuit decision in Beyond Nuclear v. NRC increases the likelihood that the Supreme Court will grant certiorari in the Fifth Circuit cases.  Although the purported ultra vires exception to the Hobbs Act was not relevant in the D.C. Circuit, the core holding about the NRC’s authority under the AEA and NWPA to license away-from-reactor interim storage was at issue in both the D.C. Circuit and the Fifth Circuit.  Further, the Tenth Circuit in 2023 addressed the Hobbs Act and upheld precedent about the NWPA.  Given the contrary caselaw in not only multiple circuits, but for the same facilities, the circuit split is alive, well, and relevant for the Court.

The Supreme Court will finalize its docket before the term starts in October.

For more information or questions, please contact Amy Roma, Partner, Stephanie Fishman, Senior Associate, or Cameron Tarry Hughes, Associate.

Authored by Amy Roma, Stephanie Fishman and Cameron Hughes.